Collection of Decedents’ DebtS in Wisconsin

 

When a loved one dies, family and friends may be contacted by creditors or debt collectors seeking payment on decedents’ debts. In general terms, a “decedent” is a person who died and left debts and/or property. The decedent’s spouse or estate may be liable for the debt.

 

Spouses

 

In Wisconsin, most debt incurred during the marriage on behalf of the marriage or family is considered a marital obligation. This means that most spouses are liable for the debts of their spouses, even if the spouse dies. These are complicated laws, though, so you should check any contracts your deceased spouse had with the creditor and confer with a lawyer who specializes in this area to determine if a spouse is liable. If you have a pre-marital agreement or believe the debt was not incurred on behalf of the marriage or family, you should try and get legal assistance.

 

Wis. Stat. § 766.55 – Obligation of spouses

(8) After the death of a spouse, property is available for satisfaction of obligations as provided in § 859.18

 

Wis. Stat. § 859.18 – Satisfaction of obligations at death of a spouse

 

Family and Friends

 

Some creditors and debt collectors may contact other surviving family members, such as parents or children, or friends, such as roommates, and ask them to voluntarily pay for the decedent’s debt or tell them they are liable for the debts. If the decedent is not your spouse and if you did not co-sign a contract, you are not liable for a debt. Even if you received the life insurance proceeds from the death of the decedent, you are not liable. The proceeds from life insurance were never actually the property of the decedent, so the proceeds are your property outright.

 

Estate Representatives

 

The creditors and debt collectors can contact you if you are a representative of a formal estate that is going through probate court. If you are unsure what to do, you should contact the probate attorney who is handling the case. Some family members get letters addressed to “The Estate of the” decedent. If you are not a representative of a formal estate and there is no formal estate, you do not have an obligation to reply to the letter. If you are not a representative but there is a representative of the estate, give the letter to the actual representative.

 

Remedies

 

If you are not the spouse, co-signor, estate representative or otherwise liable for the debt, debt collectors should not be contacting you regarding another’s debt. You are a third party, who, under consumer rights laws, cannot be notified of another person’s debt. A decedent’s estate can pursue action against a creditor or debt collector for contacting you. You may be able to pursue action against them if they are harassing you in any way in regards to the debt or threatening to sue you for the decedent’s debt.

 

Should a debt collector fail to comply with consumer laws, that collector is liable for any actual damages sustained, together with reasonable attorney's fees. If you have been subject to illegal behavior by a debt collection agency, you should contact a private consumer attorney who may be able to obtain his or her fee from the creditor or collection agency. Look at the ads in the yellow pages under "Consumer Law Attorneys." Look for ads indicating no charge for initial consultation. Also, you can obtain the name of a consumer attorney from the State Bar Lawyer Referral and Information Service at (608) 257-4666 (in Dane County) or (800) 362-9082 (statewide).

 

If you are low-income and have a consumer claim, Legal Action of Wisconsin, Inc. may be able to assist you. However, because your attorney fees may be payable by the creditor or debt collector if ordered by a court, you should consult a private consumer attorney first before seeking legal representation at Legal Action.

 

In addition, you can file a complaint with the state agency that regulates the creditor or debt collector. These agencies will try and work out the disagreement and hopefully get the creditor or debt collector to stop contacting you regarding the debt. In addition, the agencies track complaints to make sure that creditors and licensed debt collectors are following the law. If you have a problem with a creditor, you can file a complaint with the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP). The DATCP can be reached at (800) 422-7128 or (608) 224-4960. If you have a problem with a debt collector (company that is not the original creditor), you can file a complaint with the Wisconsin Department of Financial Institutions (DFI). The DFI can be reached at (800) 452-3328 or (608) 264-7969.

 

Estate’s claims:

§         Violation of Wis. Stat. § 427.014(1):

o       (e) Disclose or threaten to disclose to a person other than the customer or the customer's spouse information affecting the customer's reputation, whether or not for credit worthiness, with knowledge or reason to know that the other person does not have a legitimate business need for the information, but this paragraph does not prohibit the disclosure to another person of information permitted to be disclosed to that person by statute

§         Violation of FDCPA § 805:

o       (b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

 

Claims of relative or person contacted by dc:

§         Violation of Wis. Stat. § 427.014(1):

o       (g) Communicate with the customer or a person related to the customer with such frequency or at such unusual hours or in such a manner as can reasonably be expected to threaten or harass the customer (continue to call regarding debt if upsetting person)

o       (h) Engage in other conduct which can reasonably be expected to threaten or harass the customer or a person related to the customer (continue to call)

o       (j) Claim, or attempt or threaten to enforce a right with knowledge or reason to know that the right does not exist (claim suit against person for decedent’s account)

o       (L) Threaten action against the customer unless like action is taken in regular course or is intended with respect to the particular debt (claim suit against person for decedent’s account)

§         Violation of FDCPA § 806: A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

o       (5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number. (calling and harassing relative)

§         Violation of FDCPA § 807: A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

o       (5) The threat to take any action that cannot legally be taken or that is not intended to be taken. (threatening to sue relative)

 

The above is intended to provide general information only and is not a substitute for thorough and specific advice on an individual case. Depending on the complexity of your legal problem, you may need to consult an attorney for advice or representation.

 

This was prepared by the staff of Legal Action of Wisconsin, Inc. on behalf of low-income clients and was funded by the Legal Services Corporation, Washington, D.C., 20005. Any opinions contained herein are those of the authors and should not be construed as those of the Legal Services Corporation.

 

Legal Action of Wisconsin, Inc. does not discriminate on the basis of disability in the provision of services or in employment. If you need printed material interpreted or in a different form, or if you need assistance in using our services, please inform us. Deaf, hearing-impaired, or speech-impaired callers may reach us through the Wisconsin Telecommunication Relay System (711 or 1-800-947-3529).

 

December 2007

 

8 Legal Action of Wisconsin, Inc.